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ZB Bank secures US$5 million Afreximbank facility
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ZB Bank Limited has secured a US$5 million loan facility from the African Export-Import Bank (Afreximbank), aimed at supporting small and medium enterprises (SMEs) in Zimbabwe, particularly those engaged in export-related activities.
The agreement was signed on Friday during the Afreximbank Annual Meetings in Abuja. ZB Bank chief executive officer Elisha Chibvuri represented the bank, while Kanayo Awani, Afreximbank executive vice-president for Intra-African Trade and Export Development, signed on behalf of the continental lender.
Speaking to NewsDay Business, Chibvuri said the funding would be a game-changer for SMEs, who have long been sidelined by traditional financial institutions in favour of large corporations.
"We signed a US$5 million facility for SMEs. We want to support those SMEs who are into exports," said Chibvuri. "We are looking at the impact - US$5 million for SMEs means we can accommodate a lot of them."
The facility will cover both working capital and capital expenditure, with a repayment tenure of five years. ZB Bank says it hopes to expand access for SMEs to affordable financing, enabling them to grow and drive economic activity in downstream industries.
"What has been happening is that big companies get funding and on-lend to smaller players," Chibvuri explained. "This facility allows SMEs to come directly to the bank and access cheaper funding. That speeds up their growth cycle."
Chibvuri also revealed that the bank is in talks with Afreximbank to increase the size of the facility in future. "We’re negotiating to grow the purse size, and next time we hope to be talking about US$20 million to US$25 million."
This marks the first Afreximbank facility specifically targeted at SMEs in Zimbabwe, making ZB Bank a pioneer in promoting direct SME access to trade finance.
"We are happy to be among the banks offering this kind of targeted support," Chibvuri added. "All facilities that have been coming in so far have largely catered to big corporates."
This latest agreement brings to three the number of facilities ZB Bank has secured from Afreximbank. These include an ongoing US$20 million energy sector facility, which is currently nearing full disbursement, and a US$10 million guarantee-based facility, part of which requires cash collateral.
Chibvuri noted that uptake for the guarantee facility has been low due to the cash cover requirement, and discussions are underway to restructure it.
"We are negotiating for better terms so that security requirements are aligned with clients' export potential rather than cash availability," he said.
The new facility is expected to play a pivotal role in strengthening Zimbabwe’s SME sector, enhancing export capacity, and promoting inclusive economic development.
The agreement was signed on Friday during the Afreximbank Annual Meetings in Abuja. ZB Bank chief executive officer Elisha Chibvuri represented the bank, while Kanayo Awani, Afreximbank executive vice-president for Intra-African Trade and Export Development, signed on behalf of the continental lender.
Speaking to NewsDay Business, Chibvuri said the funding would be a game-changer for SMEs, who have long been sidelined by traditional financial institutions in favour of large corporations.
"We signed a US$5 million facility for SMEs. We want to support those SMEs who are into exports," said Chibvuri. "We are looking at the impact - US$5 million for SMEs means we can accommodate a lot of them."
The facility will cover both working capital and capital expenditure, with a repayment tenure of five years. ZB Bank says it hopes to expand access for SMEs to affordable financing, enabling them to grow and drive economic activity in downstream industries.
"What has been happening is that big companies get funding and on-lend to smaller players," Chibvuri explained. "This facility allows SMEs to come directly to the bank and access cheaper funding. That speeds up their growth cycle."
This marks the first Afreximbank facility specifically targeted at SMEs in Zimbabwe, making ZB Bank a pioneer in promoting direct SME access to trade finance.
"We are happy to be among the banks offering this kind of targeted support," Chibvuri added. "All facilities that have been coming in so far have largely catered to big corporates."
This latest agreement brings to three the number of facilities ZB Bank has secured from Afreximbank. These include an ongoing US$20 million energy sector facility, which is currently nearing full disbursement, and a US$10 million guarantee-based facility, part of which requires cash collateral.
Chibvuri noted that uptake for the guarantee facility has been low due to the cash cover requirement, and discussions are underway to restructure it.
"We are negotiating for better terms so that security requirements are aligned with clients' export potential rather than cash availability," he said.
The new facility is expected to play a pivotal role in strengthening Zimbabwe’s SME sector, enhancing export capacity, and promoting inclusive economic development.
Source - Newsday
